A number of modern software practices (MSP) have emerged over the last decade in response to the difficulties that have tended to accompany software development efforts. Recent studies of software development groups, however, indicate that these MSP are generally not being used.

Since software development is a labor-intensive, cognitive activity whose success is largely determined by individual initiative and discretion, the processes involved in software development would seem to have a high potential of being affected by organizational design variables--such as centralization and formalization--that enlarge or constrain individual influence or discretion. The aim of this study was to examine the influence of centralization and formalization on the diffusion of MSP.

Centralization and formalization have previously been employed in research designs investigating organizational innovation. The results, however, have been mixed. Three arguments can be raised toward explaining these inconsistent findings. First, innovation is a multi-phased process in which the influence of centralization and formalization could be expected to differ with each phase. A generally accepted phase sequence involves the initiation, adoption, and the implementation of an innovation. Second, innovations may be compatible or incompatible with the individual interests of organizational members. As incentives for individual initiative or discretion would vary depending on an innovation's compatibility, the expected influence of centralization and formalization should also vary. Third, organization innovations represent many vested interests, with an economical partitioning being the technical and administrative cores. As an innovation might possess significant or negligible meaning to such cores, the influence of centralization or formalization through individual behaviors would be expected to vary as well.